Studied by 0 people
Looks like no one added any tags here yet for you.
A hybrid business organization that is taxed like a partnership but offers limited liability to its owners.
- 1. Taxed like a partnership 2. Offers its owners the limited liability of shareholders and 3. Can be run like a corporation or partnership
How is LLC formed
- By filing a certificate of organization (articles of organization) with secretary of state, must have one member
What must be included in the articles of organization?
- Name of LLC, Address of LLC office, and Name and address of its registered agent
who are the owners of LLC
member
only liable to the amount of their investment
members designate a person or group to manage the LLC, which may include non members
need to specify in the operation agreement
Member managed LLC
all members vote on decisions; majority vote controls to approve most decisions
what does a member lose when they dissociate from the LLC
The process by which a member loses the right to participate in management and act as a agent for the LLC
What happens or could potentially happen if a member dissociates in violation of the operating agreement?
Considered legally wrongful and can be held liable for damages caused by the dissociation
What are the 6 provision of an operation agreement
1. Management and how future managers will be chosen or removed
2. How profit will be divided
3. How membership interest may be transferred
4. Dissociation events
5. Formal meetings
6. Voting rights
The LLC statute will govern the outcome if agreement doesn’t include one of the 6 provisions
Corporation
a legal entity created and recognized by state law
The document filed to establish a corporation
Includes name, number of shares of stock, registered agent/office info, name and address of each incorporator
Shareholders
owners of the corporation
Responsible for choosing BOD, approve amendments to the articles of incorporation/bylaws, have at least one annual meeting, vote on resolutions to change or alter the company, no responsibility for the daily management
The group elected by shareholders to oversee the management of a corporation.
Responsible for overall management
4 Duties BOD must follow
1. Duty of Care
2. Duty to make informed decisions
3. Duty to exercise reasonable supervision
4. Duty of loyalty
What are the general duties of corporate officers
run day to day operations, elected by BOD
The legal combination of two or more corporations where one continues to exist
o BOD of each corporation involved must approve the merger, majority of shareholders must vote to approve the plan
What is consolidation
Two or more corporations combine in such a way that each corporation ceases to exist and a new one merges
Offeree
The person WHOM the promise is made to
When does the common law govern a contract?
All contracts expect when its been modified or replaced by statutory law
When does UCC govern a contract
sale of goods
Goods: all things movable at the time (tangible)
Sale: Contract in which tile of goods passes from the seller to buyer for price
Manifestation of assent to the terms of an offer made in manner invited by the offer
only accept by the person whom the offer is addressed to
common law=acceptance of each and every term is required
UCC= · acceptance can add a term to the offer unless they materially alter the contract or the offer is limited to its term
How do you determine what law governs when the contract is for services and a good?
You determine which aspects is dominant and apply the law governing that aspects to the whole contract
Requirements for a valid contract
mutual assent, consideration, lack of defenses
3 things offer must include
ID of parties
subject matter of contract
quantity if in UCC
Value given in return for a promise or performance
legal value= § If it constitutes a benefit to the promisor or a detriment to the promise
NOT a consideration: gift, past or “moral consideration”
